Flintkote Co.

FLINTKOTE COMPANY 497 Flintkote Company andGeneral Warehousemen Local 598, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Petitioner. Case 21-RC-13852 April 22, 1975 DECISION AND DIRECTION OF ELECTION BY MEMBERS JENKINS, KENNEDY, AND PENELLO that if any unit were found to be appropriate it would be described as follows:' All mechanical and electrical engineers employed at the Employer's facility located at 5500 South Alameda, Vernon, California, but excluding all production, maintenance, boilerhouse, electrical, sales, clerical, office and confidential employees, all other employees, guards and supervisors as de- fined by the National Labor Relations Act, as amended. Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before Hearing Officer Robert H. Murray, Jr., of the National Labor Relations Board. Following the close of the hearing, and pursuant to Section 102.67 of the National Labor Relations Board Rules and Regula- tions, Series 8, as amended, the Regional Director for Region 21 transferred this proceeding to the Board for decision. Thereafter, the Employer filed a brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has reviewed the Hearing Officer's rul- ings made at the hearing and finds that they are free from prejudicial error. They are hereby affirmed. Upon the entire record in this proceeding, the Board fmds: 1. The parties stipulated that the Employer, Flint- kote Company, is a corporation engaged in the manu- facture of various types of building materials at its facility located at 5500 South Alameda, Vernon, Cali- fornia, and that during calendar year 1973 "the Em- ployer sold and shipped goods valued in excess of $50,000 directly to customers located outside the State of California." We find that the Employer is engaged in commerce within the meaning of the Act, and that it will effectuate the purposes of the Act to assert jurisdic- tion herein. 2. The labor organization involved claims to repre- sent certain employees of the Employer. 3. A question affecting commerce exists concerning the representation of certain employees of the Em- ployer within the meaning of Sections 9(c)(1) and 2(6) and (7) of the Act. 4. The Petitioner, which is the exclusive bargaining representative of the production and maintenance em- ployees at the Employer's Vernon, California, plant, seeks to represent a separate unit of the mechanical and electrical engineers employed at the same facility. While the Employer contends that the mechanical and electrical engineers are managerial and/or confidential employees and therefore excluded from the coverage of the Act, it was stipulated on the first day of the hearing There is no history of collective bargaining involving the petitioned-for employees. The Employer's Vernon facility, known as the Pio- neer Division, manufactures building materials. There are four plants or departments within that facility: a roofing plant, a flooring plant, a paper mill, and a protective products plant. Each of these plants has its own separate management which is responsible to the general manager of the division, who, in turn, is respon- sible to corporate management. Responsibility for the conduct of labor relations at the Vernon facility is vested in the director of industrial relations. He negoti- ates labor agreements and supervises the handling of grievances involving employees at the Vernon plant. The record reveals that the building materials indus- try is intensely competitive. Automation of the plant manufacturing processes, including both job elimina- tion and increasing machine speed and capacity per man hour, is the principal means of reducing costs and thereby maintaining market position. At the Em- ployer's Vernon facility, responsibility for automation is centered in the engineering department. It provides services to each of the four departments within the division and it is operated out of a central office. The engineering department is staffed by a chief engineer, and assistant chief engineer, four mechanical engineers, one electrical engineer, a draftsman, and a secretary, It is the status of the mechanical and electrical engineers, generally referred to by the parties as "project engi- neers," which is in controversy. The Employer argues that the project engineers can not be included in any unit because they are managerial and/or confidential employees. In addition, the Em- ployer contends that the engineers are to be denied representation because unionization would create a conflict of interest between their job responsibilities and their loyalty to the Union. In support of its posi- tion, the Employer's evidence at the hearing consisted primarily of a detailed exposition of the job functions of its project engineers. 1 The parties also stipulated, and we find, that the mechanical and electri- cal engineers are professional employees within the meaning of Sec 2(12)(a) of the Act 217 NLRB No. 85 498 DECISIONS OF NATIONAL LABOR RELATIONS BOARD A. The Project Engineer 's Job Functions An engineering project begins with a request from plant, division, or corporate management to study a particular problem with a view towards reducing costs by eliminating jobs or increasing capacity. After an initial briefing by the plant manager concerning the purpose of the change, the project engineer begins to accumulate the data he requires to design the desired improvement. Once the project engineer is able to for- mulate a preliminary design, he commences to collect data for a cost estimate. The engineer normally solicits estimates from contractors and suppliers himself, al- though he can call upon the purchasing department to solicit some of these estimates if he so desires. The net result of the engineer's efforts so far, a preliminary design of the proposed change and an esti- mate of its cost, is then reviewed by the plant manager, by the engineering department, and by division man- agement. Review at this stage is of a somewhat cursory nature to determine whether the project merits further consideration. If so, the data collected is supplied to the accounting department for computation of the es- timated profitability of the project on the basis of such additional factors as depreciation of equipment and current interest rates. Once the accounting department has completed this computation, its cost study is forwarded to the engi- neering department and division management for re- view. At this time, management officials make the criti- cal decision as to whether the rate of return on the investment computed by the accounting department is sufficient to justify implementation of the project. If they decide that it is not, the project is canceled. If they decide that the return on the investment is sufficient, the project is approved, unless it involves a substantial capital outlay,' in which case approval at the corpo- rate level is also required. After final approval is received, the engineer reviews the project with the plant manager and proceeds to finalize the design and solicit bids from suppliers and contractors. As in the earlier cost estimate stage, the project engineer's solicitation of bids is unsupervised, although he may utilize the services of the purchasing department if he wishes. The project engineer's choice of supplier or contractor is reviewed by the plant manager and the engineering department before a con- tract is awarded. Except for items of a routine nature or in instances where a contractor is needed on an emergency basis, the project engineer has no authority to award contracts. However, as a practical matter, the 2 The parties stipulated that corporate approval is required on capital projects (involving the installation of new equipment to increase produc- tivity) in excess of $10,000 and repair projects (involving the replacement of a broken piece of equipment) in excess of $50,000. engineer's choice of contractor -or supplier is rarely questioned by the plant manager,-the engineering de- partment, or the purchasing department where the for- mal signing of the contract takes place. Following the award of the contracts, the actual con- struction of the project commences. In this final stage of the project, the engineer works in close contact with the plant manager in scheduling the installation of the equipment in order to minimize interruptions in pro- duction and to reduce the layoffs of production and maintenance employees which sometimes result. B. Conclusions (1) The Employer argues that these decisions and judgments of the project engineers are expressions of managerial authority, despite the fact that other, clearly management, officials decide whether their recommendations will be implemented, because these management decision makers must, as a practical mat- ter, rely heavily on the discretion and technical exper- tise of the project engineers. In addition, the Employer asserts that the project engineers are managerial em- ployees because their participation in automation pro- grams has a substantial impact upon industrial rela- tions policies. We find no merit in the Employer's position. The Board defines managerial employees as those who "for- mulate and effectuate management policies by express- ing and making operative the decisions of their em- ployer, and those who have discretion in the performance of their jobs independent of their em- ployer's established policy." General Dynamics Corpo- ration, Convair Aerospace Division, San Diego Operations 3 In that case, we rejected-the contention that engineers exercising technical discretion and judg- ment are managerial employees within the above defi- nition, notwithstanding the fact that their work may cause changes in company direction. We find the in- stant case squarely controlled by our decision in Gen- eral Dynamics.4 In the case at hand, engineering judgments do form the basis of the critical decision of whether or not to automate a particular process, but, "[i]n every instance, management makes th[at] policy decision, the effective decision whether to reject or pursue the results of those technical judgments, all of which have been routinely rendered on the basis of, and as a result of, professional 3 213 NLRB No. 124 (1974), citing Palace Laundry Dry Cleaning Corporation, 75 NLRB 320 (1947), and Eastern Camera and Photo Corp., 140 NLRB 569 (1963) For current judicial approval of the definition, see NLRB. v. Bell Aerospace Company, Division of Textron, Inc., 416 U.S. 267 (1974) 4 See also Chrysler Corporation (Airtemp Division), 192 NLRB 1208, 1209 (1971), where the Board held, in summarizing prior cases, that indus- trial engineers are not managerial employees by virtue of the fact that they "suggest methods changes to increase efficiency and reduce costs " FLINTKOTE COMPANY and/or technical expertise and in accordance with the task assigned. . . . Their discretions and decisions are predicated solely on a technical-base, and culminate in technical reports or recommendations to managerial superiors who, in turn , determine, establish, and carry out management direction, -i.e., `policy,' by approving or disapproving the recommendations presented.s' Similarly, as to industrial -relations practices and poli- cies, technical decisions and judgments within the engi- neering framework may ultimately have an, influence, but this impact results only after management officials have made the policy decision to implement the par- ticular recommendation. In short, we conclude that the project engineers do not formulate or effectuate management policies, since their recommendations must be approved by manage- ment officials, and they do not have discretion in their job performance independent of -their Employer's es- tablished policy. Therefore, we find that the project engineers are not managerial employees. - (2) The Employer asserts that the project engineers are confidential employees because they assist and act in a confidential capacity to the plant managers.6 In assessing the merits of the Employer's contention, we apply the standards which the Board enunciated in The B. F Goodrich Company, supra at 724, and has since consistently followed; namely, that employees will be excluded as confidential only when it appears that "they assist and act in a confidential capacity to per- sons who formulate, determine, and effectuate manage- ment policies in the field of labor relations." As the Goodrich case makes clear, the quoted considerations are to be assessed -in the conjunctive. Under that stand- ard, we are not pursuaded that the project engineers are to be denied representation if they wish it. First, the project engineers are not confidential em- ployees because their relationship with the plant managers is not one of furnishing assistanceto the plant managers in the labor relations field . Rather, the pro- ject engineer functions as a technical advisor to the plant manager, helping to increase efficiency and to solve various production problems. Neither the project engineer's actions nor his counsel substantially assists 5 General Dynamics Corporation, ConvairAerospace Division, San Diego Operations, supra. - 6 We find no merit in the Employer's contention that fn. 12 of the Su- preme Court's decision in N.L.R.B. v. Bell Aerospace Company, Division of Textron, Inc., supra, expanded the Board's traditional test of confidential employees as set forth in Ford Motor Company, 66 NLRB 1317 (1946), and reaffirmed in The B. F Goodrich Company, 115 NLRB 722 (1956). The Court's comments were dicta, since the confidentiality issue was not before it, and those comments merely indicate that when Congress amended the Act in 1947 it recognized that certain groups were impliedly excluded from the Act's coverage, although it misconstrued the breadth of the test em- ployed by the Board for excluding one of those groups, i e., confidential employees Therefore, in accordance with prior Board determinations, we reject the Employer's argument that the project engineers are confidential employees because they have access to trade secrets Copperweld Steel Com- pany, 102 NLRB 1229, 1230-31 (1953). 499 the plant manager in the performance of his labor rela- tions duties. Secondly, the plant managers' functions in connec- tion with labor relations are very limited. Thus, there is no evidence that they play any role in the formulation or determination of labor policies . Rather, the record reveals that responsibility for the negotiation of collec- tive-bargaining contracts at the Vernon facility is vested in the director of industrial relations. Nor would our conclusion be altered if we were to assume that the plant managers advise the director- of industrial rela- tions about , matters relevant to the development of management's labor policies, as we do not regard such advisory participation by the plant managers as a suffi- cient reason for denying representation -to the project engineers.' Although the plant managers' authority to resolve grievances may involve them in the effectuation of the Employer's labor policies, the Board has consist- ently held since the B. F Goodrich case that an em- ployee will not be regarded as confidential merely by virtue of being a secretary to a person involved in the handling of grievances.' The project engineers in the instant case have no role in connection with these func- tions of the plant managers, -and we see no reason to depart from the rule where the alleged- confidential employee is an engineer rather than a secretary. (3) Finally, the Employer contends that the project engineers are to be excluded from the Act's coverage because unionization would create a conflict of interest between their job responsibilities and their loyalty to the Union. More specifically, the Employer argues that the project engineers effectively control the awarding of bids and therefore would be able to "buy union," rather than purchase solely in their Employer's best interests. It is also asserted that they could effect "make or buy" decisions in favor of "make," thus creating additional work for their brother union members in the Em- ployer's central maintenance department . Noting that the Board rejected this argument in Bell Aerospace Company, Division of Textron, Inc., 190 NLRB 431-432 (1971),9 the Employer maintains that, unlike the employer in Textron, it has no practical way to police against such disloyalty. On the record, we find no merit in the Employer's position. Unlike the buyers in Textron, the project engi- neers have no general authority to commit the Em- ployer's credit. Unless the contract is for either a rou- tine item or of an emergency character, the project 7 See Holly Sugar Corporation, 193 NLRB 1024, 1026 (1971), Weyerha- euser Company, 173 NLRB 1170, 1173 (1968). 8 Holly Sugar Corporation, supra at 1025-26; Weyerhaeuser Company, supra at 1172-73 9 Motion for reconsideration denied 196 NLRB 827 (1972), affd. in the unfair labor practice proceeding 197 NLRB 209 (1972), enforcement denied 475 F 2d 485 (C A. 2, 1973), reversed in part and remanded 416 U.S 267 (1974). 500' DECISIONS OF NATIONAL LABOR RELATIONS BOARD engineer's choice of supplier or contractor is reviewed by the plant manager, the engineering department, and the purchasing department, where the formal signing of the contract takes place. Therefore, the Employer's ability to exercise control over the engineer's discretion and his alleged receptivity to union bids is at least as great if not greater than that of the employer in Tex- tron, whose buyers could commit his credit for amounts up to $5,000 without supervision., Under these circumstances, we find our rationale in Textron10 is applicable, and, on this record, we con- clude, as we did there, that the discretion of the project engineers is not "either presently so unbridled or poten- tially so uncontrollable as to create the possible prob- lems of which the Employer complains. The problems raised seem to be more in the nature of unsupported conjecture." (4) In accordance with our findings herein and with the parties' stipulation as to the appropriate unit, we shall direct an election in the following unit which, we And, constitutes a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All mechanical and electrical engineers employed at the Employer's facility located at 5500 South Alameda, Vernon, California, but excluding all production, maintenance, boilerhouse, electrical, sales, clerical, office, and confidential employees, all other employees, guards and supervisors as de- fined by the National Labor Relations Act, as amended. [Direction of Election omitted from publication.]1 MEMBER KENNEDY, dissenting: I disagree with the conclusion of my colleagues that the project engineers are neither confidential nor managerial employees. Accordingly, I would not direct an election in a unit limited to the five project engineers at the Employer's Vernon, California, facility. The Majority opinion is correct in stating that the record reveals that the building materials industry is intensely competitive and that the principal means of reducing costs is through the automation of the Em- ployer's `manufacturing processes . It is the function of 10 Although the Supreme Court's Textron decision recited the employer's conflict-of-interest argument in its statement of facts, the Court, in remand- ing the case to the Board to determine the status of the buyers, did not pass on the merits of the employer's claim. 11 [Rxcelszor footnote omitted from publication.] the "project engineers" to conceive and design the automation equipment. It is crystal clear that the automation of the Em- ployer's manufacturing processes has the necessary ef- fect of eliminating jobs throughout the plant. Mani- festly, there is a conflict of interest in the job responsibilities of the project engineers and the Em- ployer's production employees. The Supreme Court's decision in N. L. N.L.R.B. v. Bell Aerospace Company, Divi- sion of Textron, Inc., 416 U.S. 267 (1974), made clear that the exclusion of confidential employees should not be limited to "persons working in `labor relations, per- sonnel and employment departments.' " The Court pointed out that, as a result of the Packard decision12 permitting unionization of supervisors un- der the Wagner Act, the legislative history of the Taft- Hartley Act reflects the concern of Congress "over the Board's broad reading of the term `employee' to include those clearly within the managerial hierarchy." The Court concluded footnote 12 of its opinion with the observation: The discussion of "confidential employees" in both the House and Conference reports, however, unmistakably refers to that term as defined in the House bill, which was not limited just to those in "labor relations." Thus, although Congress may have misconstrued recent Board practice, it clearly thought that the Act did not cover "confi- dential employees" even under a broad definition of that term. The Court observed that both the Senate and House reports had noted that the Board's decisions with re- spect to supervisors "had hurt productivity." Not only had there been a "reduction of industrial output" but employers had been deprived "of the loyal representa- tions to whom they were entitled." It seems to me that the project engineers, whose functions and responsibil- ity are to increase the productivity of this plant by the elimination of jobs, are both confidential and managerial. It seems to me that the interest of these project engineers are clearly aligned with management and not with the rank-and-file employees. I think these project engineers do "formulate and effectuate manage- ment policies" and do exercise discretion and in- dependent judgment in their role in establishing such policies. Accordingly, they are managerial employees. 12 Packard Motor Car Co., 64 NLRB 1212 (1945), enfd. 157 F 2d 80 (C A 6, 1946), 330 U S 485 (1947) FLINTKOTE COMPANY My colleagues find the disposition of this case is squarely controlled by the Board's recent decision in General Dynamics Corporation, Convair Aerospace Division, San Diego Operations, reported at 213 NLRB No. 124 (1974). I note that the General Dynamics deci- sion was issued by a panel of the Board in which I did not participate. I have reevaluated the decision in 501 Chrysler Corporation (Airtemp Division), 192' NLRB 1208 (1971), in the light of the Supreme Court's deci- sion in Bell Aerospace and concluded that I erred in that case. - Since I find that the project engineers are not em- ployees within the meaning of the Act, I conclude that the petition must be dismissed.